Taipei, July 27 (CNA) As the average unoccupied rate for Grade A office space in Taipei falls, growth in rent is forecast to hit the highest for a decade in 2019, according to commercial real estate services and investment firm CBRE Group Inc.
In a research report, CBRE said the average unoccupied rate for Grade A office space in Taipei fell for the fifth consecutive quarter in the second quarter of this year and average rent rose 3.4 percent from a year earlier to NT$2,765 (US$89.19) per ping (one ping equals 3.3 square meters).
CBRE said as more multinational enterprises move into Grade A offices in Taipei, the city took up more than 10,000 ping in Grade A office space over the past 18 months, tripling the long term average.
For premium Grade A offices located in Xinyi District, the most important business district in Taipei, average rent in the April-June period hit NT$3,428 per ping, the highest ever.
CBRE said demand for Grade A offices in Taipei from the service sector, technology, and real estate industries has been strong over the past two quarters, with the three industries accounting for more than 20 percent of Grade A office leases in the city.
If the trend continues, rental of Grade A offices in Taipei is expected to grow for the rest of the year and could reach 3.5 percent for 2019, the highest in a decade, CBRE said.
The advisory firm said supply of Grade A offices in Taipei has been limited so the unoccupied rate could fall below 2 percent in two years and the room for price negotiations for tenants be reduced accordingly.
Meanwhile, CBRE said Taipei came 18th in the Asia Pacific region in terms of average rent for premium Grade A office space in the first quarter of this year.
In the January-March period, the average rent for premium Grade A office space in Taipei hit US$70.28 per square meter a year, little changed from a year earlier, CBRE said.
Taipei was far behind Hong Kong's Central District, where the average rent for premium Grade A office space was US$322 per square meter a year, followed by Hong Kong's Kowloon District with US$208.67, Beijing's Financial Street with US$187.77, Beijing's Central Business District with US$177.05 and Tokyo's Marunouch-Otemachi area with US$167.82, CBRE said.
Connaught Place in New Delhi, India came sixth with US$143.97 per square meter a year, followed by Pudong District, Shanghai with US$128.51, Singapore with US$114.28, Puxi District, Shanghai with US$109.36 and Seoul's Central Business District with US$104.53, according to CBRE.
